A note on the effect of PCAOB inspections on the audit quality of triennial CPA firms

Alan I. Blankley, Philip Keejae Hong

Research output: Contribution to journalArticlepeer-review

Abstract

This note reports the results of a study conducted regarding PCAOB inspections of triennialCPA firms. The purpose was to see if there was any evidence that inspections contributed to improved audit quality. It was found that small firms did not correct staffing deficiencies, which were related to previous audit deficiencies determined by the PCAOB. However, deficient firms did increase their audit fees significantly more following their first inspection than non-deficient firms. This result is consistent with applying greater audit effort after the inspection. Interestingly, this response does not persist through second inspections.
Original languageEnglish
Pages (from-to)212-216
JournalResearch in Accounting Regulation
Volume26
Issue number2
StatePublished - Oct 2014

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